Friday, March 14, 2014

Capitalism Redefined

A terrific must-read article by Nick Hanauer and Eric Beinhocker.

For everyone but the top 1 percent of earners, the American economy is broken. Since the 1980s, there has been a widening disconnect between the lives lived by ordinary Americans and the statistics that say our prosperity is growing. Despite the setback of the Great Recession, the U.S. economy more than doubled in size during the last three decades while middle-class incomes and buying power have stagnated. Great fortunes were made while many baby boomers lost their retirement savings. Corporate profits reached record highs while social mobility reached record lows, lagging behind other developed countries. For too many families, the American Dream is becoming more a historical memory than an achievable reality.

These facts don’t just highlight the issues of inequality and the growing power of a plutocracy. They should also force us to ask a deeper set of questions about how our economy works—and, crucially, about how we assess and measure the very idea of economic progress.

How can it be that great wealth is created on Wall Street with products like credit-default swaps that destroyed the wealth of ordinary Americans—and yet we count this activity as growth? Likewise, fortunes are made manufacturing food products that make Americans fatter, sicker, and shorter-lived. And yet we count this as growth too—including the massive extra costs of health care. Global warming creates more frequent hurricanes, which destroy cities and lives. Yet the economic activity to repair the damage ends up getting counted as growth as well.

Our economic policy discussions are nearly always focused on making us wealthier and on generating the economic growth to accomplish that. Great debates rage about whether to raise or lower interest rates, or increase or decrease regulation, and our political system has been paralyzed by a bitter ideological struggle over the budget. But there is too little debate about what it is all for. Hardly anyone ever asks: What kind of growth do we want? What does “wealth” mean? And what will it do for our lives?

Read it all here.

7 comments:

  1. When I was reading your post I felt some drops of tear on my face. I'm not from USA, I'm living in Iran and I'm working hard as BSc to be accepted by a university in USA to continue my education and research in my interested field(string theory). The difficulty of the path I'm passing has made me to think about the difficulty and the reasons of it. This is a dominant thought in Iran, in which USA is the best place to live and study. According to this principle I'm started to take some qualification exams as GRE & TOEFL to apply to USA. But through a year of studying I've been thinking about the statement of one of my friends, who told getting admitted by a fund position in theoretical field in USA is very hard and for a student as me who was born and has lived in a deprived area in an endpoint of Iran, it becomes much more sophisticated. Actually I'm suffered a lot of disparities in our own society. The rich families who're living in Iran metropolises, they use the best educational facilities and they even get better scores than us. I mean disparities even effects education too. However, the nature doesn't know good or bad, the only thing it knows is balance and imbalance. Maybe we can ignore our responsibility for other humans but we can't ignore our responsibility for nature, because it would be and end to our world.

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  2. http://itcomesundone.wordpress.com/2014/03/19/the-economy-of-the-environment/ I thought you'd also enjoy this. It goes well with what you're talking about here.

    Enjoy!

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  3. It is very easy to write supporting statement for university which will help in all kind of matters.

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